Month: March 2022

What a Litigation Funder Learned from A Litigation Funding Conference

Marla Decker

I recently attended the LITFINCON conference in Houston, Texas. This was my first in-person conference I attended in 2+ years, and it was a welcome breath of fresh Texas (blissfully warm) air.

The conference organizers (Siltstone Capital and Litigo Financial) did a great job of creating a diverse set of topics and finding great panelists. Speakers included funders, law firm partners, general counsel, brokers, investors and even judges. We covered a wide range of topics including the basics of litigation funding, litigation finance as a maturing asset class, the role of brokers, rise of secondary markets, and even the intersection of litigation funding with block chain. The stars of the show were probably the judicial panelists, including two federal judges from the Southern District of Texas, and a Texas state court judge. It’s unusual to get a view from the judiciary outside of the courtroom, let alone one on litigation finance, and this panel was particularly engaged and candid about their knowledge and impressions.

Why A Delaware Supreme Court Decision Affirming Shifting a Contingency Fee to the Losing Party Could Have Applications to Recovering the Costs of Litigation Funding

Marla Decker

n general, the U.S. legal system requires parties to bear their own costs, and does not automate “loser-pays” rules like other jurisdictions or arbitral institutions. There are certain exceptions, notably when the dispute arises under a contract providing that the prevailing party will be entitled to its fees and costs. An incentive to both parties to include such a provision is so that each party will truly be “made whole” after any dispute, rather than netting from any recovery the costs of legal fees and expenses.

Can a Prevailing Party in Arbitration Recover its Litigation Funding Costs?

Marla Decker

In addition to providing finance for commercial litigation cases in the U.S. and Canada, Lake Whillans routinely funds claimants in arbitrations. In recent years there has been increasing attention to litigation funding arrangements in arbitrations, and a number of arbitral institutions have inserted rules to address the practice, both to increase transparency and to promote fairness to both sides. One emerging question in the field, where cost-shifting to the losing party is a typical part of awards, is whether tribunals will award a prevailing claimant the value of its litigation funding costs, in addition to damages and other legal costs. The confidential nature of most commercial arbitral awards makes it difficult to know how often this occurs (or has even been sought), but tribunals have permitted claimants to recover funding costs in some instances. And there is growing precedent to indicate that where tribunals award funding costs, courts will not second-guess the decision — at least for arbitrations sited in England and Wales.

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The best way for companies and their counsel to determine if litigation finance is an attractive option is to discuss it with us.

Lee Drucker drucker@lakewhillans.com